Billionaire Fisher lambasts dour sentiment, eyes US bull market

By Herbert Lash

NEW YORK, Oct 20 (BestGrowthStock) – Sentiment may be sour but a
bull market in U.S. stocks (Read more about the stock market today. ) that roared in September has more
upside, according to billionaire investor Ken Fisher.

The drop in risk aversion after U.S. mid-term elections is
typically good for markets, while Iran poses the biggest
potential headwind to equity markets, Fisher said on
Wednesday.

The U.S. election calendar provides a fairly predictable
cycle for stock markets, Fisher said. The year after mid-term
elections is usually the most risk-free because politics
subsides before the ramp-up to the presidential race, he said.

“The six and 12 months after mid-term elections have always
been positive because political risk aversion falls and when
political risk aversion falls, total risk aversion falls,” said
Fisher, who oversees $37 billion in assets as founder of Fisher
Investments in Woodside, California.

“The biggest risk to markets are the issues that relate to
geopolitics,” said the veteran columnist for Forbes magazine.
“The real issue is Iran and Iran is scary. Iran could blow up
at any time, and is a real problem.”

Fisher is bullish on stocks, and pans the worry warts who
fret the economy is poised for a double dip recession or subpar
growth at best. Bull markets occur after recessions, and the
bull market that ended in 2007 was cut short, never reaching
the euphoria marked by a mad rush into stocks, he said.

“The notion that equities are terrible is widely perceived
today,” he said. “Most bull markets culminate with some amount
of over exuberance towards to stocks. In 2007 we did have that.
We had a bull market that was truncated.”

Fisher finds that Wall Street is consumed by false
assumptions about investing, a notion that is the theme of his
latest book, “Debunkery.”

All myths, Fisher insists. Take the adage “don’t fight the
Fed,” which holds lower interest rates are good for stocks and
vice versa as the Federal Reserve tightens monetary policy.

The Fed raised rates from 2004 through 2006, a good bull
run for stocks, and cut rates for the rest of the decade,
periods that have often has been bearish.

Another Wall Street myth Fisher pours salt on is the axiom
“sell in May and go away,” lore that is almost as widely
propagated as the advice to “buy low and sell high.”

Since 1926 through last year, May has averaged a return of
0.38 percent. Not the best, but better than September and
February. But the summer months of June, July and August have
returned 4.51 percent, the best three consecutive months.

“Debunkery” is Fisher’s seventh book. He said writing books
crystallized long-term ideas, provides an outlet for what he
feels people need to hear

Fisher is overweight international stocks, with his picks
roughly equally divided between developed and developing
economies. That puts a big emphasis on emerging markets.

Unlike recoveries of the past, developing economies are
leading the world out of recession instead of the United
States.

For example, Fisher likes airlines and utilities in
emerging markets, stocks that typically are viewed as death
traps or stodgy investments at best in the developed world,
because they’re great growth stories in developing economies.

He cited the planned merger announced in August of Chile’s
LAN Airlines SA (LAN.SN: )(LFL.N: ) and Brazil’s TAM
(TAM.N: )(TAMM3.SA: ).

Fisher caters to high net worth and institutional
investors. A typical portfolio at Fisher Investments returned
15.3 percent in the third quarter, compared to a 13.8 percent
gain in the MSCI world index.
(Reporting by Herbert Lash)

Billionaire Fisher lambasts dour sentiment, eyes US bull market